Does Spray Net reserve the right to operate franchised businesses outside of a franchisee's Designated Territory?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
You expressly understand and agree that we and our affiliates shall have the right, in our sole discretion, to: (i) own and operate franchised businesses at any location(s) outside of the Designated Territory under the Proprietary Marks, or to license others the right to own and operate Spray-Net businesses at any location(s) outside of the Designated Territory under the Proprietary Marks and System; (ii) the right to own and operate businesses under different marks at any location(s) inside or outside of your Designated Territory, or license to others the right to own and operate such businesses, under different marks at any location(s) inside or outside of Designated Territory (such businesses will not primarily provide painting products and services); (iii) use the Proprietary Marks and System in connection with services and products, promotional and marketing efforts, or related items, or in alternative channels of distribution, including the sale of any products in wholesale and retail stores, via the Internet, and through mail order catalog, without regard to location; and (iv) use the Proprietary Marks and System, and license others to use the Marks and System to engage in any other activities not expressly prohibited in this Agreement.
You do not have any of the foregoing rights under your Franchise Agreement, and we are not required to provide you any compensation in connection with (a) soliciting or accepting orders inside your Designated Territory via any alternative channels of distribution or (b) any of the other reserved rights above.
Source: Item 12 — TERRITORY (FDD pages 49–52)
What This Means (2025 FDD)
According to Spray Net's 2025 Franchise Disclosure Document, Spray Net retains the right to operate or license others to operate franchised businesses outside of a franchisee's designated territory. Specifically, Spray Net has the right to own and operate franchised businesses under the Proprietary Marks, or to license others to do so, at any location outside of the franchisee's Designated Territory. This means that while a franchisee is granted a specific territory, Spray Net is not restricted from establishing other franchises or allowing other franchisees to operate outside of those boundaries.
Spray Net also reserves the right to operate businesses under different marks, even within a franchisee's Designated Territory, provided these businesses do not primarily offer painting products and services. Additionally, Spray Net can use its Proprietary Marks and System in alternative channels of distribution, such as wholesale and retail stores, the Internet, and mail order catalogs, without regard to location. These rights are not granted to the franchisee, and the franchisee will not receive compensation for orders solicited or accepted inside their Designated Territory through these alternative channels.
Furthermore, the FDD states that franchisees do not receive an exclusive territory. Franchisees may face competition from other franchisees, company-owned outlets, or other distribution channels controlled by Spray Net. However, Spray Net assures that as long as the franchisee complies with the terms of the Franchise Agreement, Spray Net will not establish another business utilizing the Proprietary Marks and System from a location within the franchisee's Designated Territory. Spray Net also reserves the right to offer Ancillary Services within a franchisee's territory either themselves, through an affiliate, or through another franchisee, unless the franchisee purchases the rights to offer these services themselves.